Stress Leave

HR Policies

13 May 2025 (Last updated 19 May 2025)

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A survey conducted by Statistics New Zealand has found that 1 in 5 New Zealand workers report always or often being stressed by work. In addition, New Zealanders who reported high workloads have two times greater odds of experiencing high psychological distress. These numbers are a growing concern for small businesses and employers who are already juggling multiple roles and responsibilities.

The guide below explains workplace stressors and how employers can manage stress leave requests.

Stress in the workplace

There are several reasons why employees may be stressed in the workplace. Some of the most common reasons are:

  • Unreasonable workload.
  • Bullying  in the workplace.
  • Restructuring of the workplace.
  • Change of position, duty, or responsibilities.
  • Dangerous work environment with a lack of health and safety precautions.
  • Toxic work environment.
  • Exposure to trauma.
  • Isolated working conditions.

Common signs of stress

Often, the signs of stress are not made clear to everyone in the workplace. It is common for employees to hide the symptoms of stress, out of fear of being punished or judged by others.

However, there are common behaviour patterns for employers to look out for:

  • Anxiety.
  • Reduced productivity.
  • Illness and disease.
  • Antisocial behaviour.
  • Low morale.
  • Lack of engagement.

A combination of one or more of these symptoms is a good indicator that a person is stressed. Of course, due to the complex nature of mental and physical stress; it is important to avoid jumping to conclusions. In conversations with employees, employers must be sensitive and considerate of any support that can be provided.

Stress leave

While stress leave is not defined in New Zealand legislation, employers have health and safety obligations to provide a safe work environment for all employees. This includes monitoring, identifying, and managing workplace stress. Stress leave is an optional type of leave that employees may get access to in case of workplace stress. Whether this leave is available, paid or unpaid, is completely up to the employer.

If an employee becomes ill due to stress, they can take sick leave under the normal conditions of sick leave. An employee who needs additional time off beyond their sick leave entitlement can negotiate with their employer regarding the length of leave and whether the leave is paid or unpaid.

It is up to the employer to decide if they are able to accommodate additional time off of work due to stress. However, an employee can dispute their decision if they feel the amount of time off has not been adequate.

Managing stress in the workplace

Employers have an obligation to provide a safe and fair work environment for all employees.

To comply with their duty of care, employers must monitor employee performance, workload, and the kind of tasks they are performing. If an employer discovers signs of stress or suspects an employee is stressed, these concerns should be discussed so a solution can be found to manage the problem.

Whether or not the stress is caused by the workplace, employers can advise employees to visit a doctor or employee assistance program to identify the source of the problem. Employers are not legally required to do this, but it is part of their responsibility to reduce threats to health and safety in the workplace.

Employer obligations around stress leave

In an ideal situation, employees would not need stress leave as employers will mitigate stress and create positive and healthy workplaces. However, in situations where the need for stress leave does arise, what are employer obligations in New Zealand?

Stress is classified as a mental health concern and forms part of an employer’s health and safety responsibilities. Employers must handle any situation that concerns stress responsibly and support the employee as needed.

Other than the health and safety responsibilities, there are multiple benefits to reducing stress and improving mental well-being in the workplace, such as:

  • When employees are healthy, their productivity is boosted.
  • Improves company culture and morale.
  • Makes recruitment easier.
  • Employees are motivated to stay committed to their roles and the company.

If an employee has been diagnosed as suffering from work-related stress, the employer should review the employee's workload, duties and overall working environment to assess whether these have contributed to the employee's stress.

It is recommended to have a meeting with the employee to discuss their stress, work and how to prevent future absences once they are fit enough to attend. You may need to investigate if there is a wider issue that needs to be addressed or if the business is able to make reasonable accommodations to facilitate the employee's return to work.

Stress leave policy

If an employer wants to implement stress leave in their workplace, then it is highly recommended that they establish a stress leave policy to outline its parameters. The policy should set out clear and consistent practices for requesting stress leave and the potential responses to those requests.

It will communicate to the employees that they can discuss their concerns without retribution or judgment from the organization. The stress leave policy should outline a reasonable course of action to manage work-related stress and assist employees in any way possible for them to recover and get back to work.

The policy can include:

  • Reason for taking leave (can be broad if the employee doesn’t wish to disclose).
  • Duration of the leave.
  • Return to work plan.
  • Certificates/Evidence necessary.

In the stress leave policy, emphasise the type of evidence considered acceptable by the company. An employer can ask an employee to submit a medical certificate although the certificate doesn’t need to specify anything other than their unfitness for work.

Before you draft a stress leave policy, consider discussing it with an employment relations professional and a health professional. This will support in devising a relevant and practical stress leave policy for everyone.

Strategies for employers to reduce workplace stress

There are some ways that employers can mitigate or reduce workplace stress:

  • Balancing job demands to employee skills and capacities.
  • Setting realistic pace and timelines.
  • Having clear and consistent policies on behaviour and work standards.
  • Having regular meetings with the team.
  • Having regular meetings with the employee in a 1:1 setting.
  • Encouraging employees to take leave as needed.
  • Encouraging a positive work culture.
  • Having flexible work arrangements.
  • Regularly conducting surveys to understand team morale.
  • Regularly conducting risk assessments and health and safety surveys.
  • Offering training to employees for hard and soft skills.

Build healthy workplaces with Peninsula

Workplace stress can have a huge impact on mental well-being. It’s not just mental health, studies have found that ongoing stress can lead to physical conditions such as heart disease or headaches. Employers have a legal responsibility to mitigate risks to mental health, but they also have a moral responsibility to their employees on a personal level.

Managing business’ needs as well as your employees’ welfare needs can be a difficult balance. Peninsula offers support and guidance to small businesses in New Zealand looking to implement stress leave and improve their workplace culture. Our resources include tools, training, software, policies, and documents that can help draft a stress leave policy, boost your company’s productivity, and create effective systems of work. Call our expert team for free initial advice.

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